Options Theory for Professional Trading

Chapters

1.1– Breaking the Ice As with any of the previous modules in Varsity, we will again make the same old assumption that you are new to options and therefore know nothing about options. For this reason ..

3.1 – Buying call option In the previous chapters we looked at the basic structure of a call option and understood the broad context under which it makes sense to buy a call option. In this chapter, ..

5.1 – Getting the orientation right I hope by now you are through with the practicalities of a Call option from both the buyers and sellers perspective. If you are indeed familiar with the call opti ..

6.1 – Building the case Previously we understood that, an option seller and the buyer are like two sides of the same coin. They have a diametrically opposite view on markets. Going by this, if the P ..

13.1 – The Curvature We now know for a fact that the Delta of an option is a variable, as it constantly changes its value relative to the change in the underlying. Let me repost the graph of the del ..

17.1 – Background In the earlier chapter we had this discussion about the range within which Nifty is likely to trade given that we know its annualized volatility. We arrived at an upper and lower e ..

18.1 – Striking it right The last couple of chapters have given a basic understanding on volatility, standard deviation, normal distribution etc. We will now use this information for few practical t ..

19.1 – Volatility Types The last few chapters have laid a foundation of sorts to help us understand Volatility better. We now know what it means, how to calculate the same, and use the volatility in ..